HSBC to price annual income opportunity CDs linked to emerging markets stock basket

By Angela McDaniels

Tacoma, Wash., Aug. 2 - HSBC Bank USA, NA plans to price annual income opportunity certificates of deposit due Aug. 29, 2016 linked to a basket of stocks, according to a term sheet.

The basket includes the common stocks of Check Point Software Technologies Ltd., Infosys Technologies Ltd. and Mobile Telesystems OJSC and the American Depositary Receipts of Anglogold Ashanti Ltd., Baidu Inc., Gold Fields Ltd., Harmony Gold Mining Co. Ltd., Icici Bank Ltd., Teva Pharmaceutical Industries Ltd., Turkcell Iletisim Hizmetleri AS, Tata Motors Ltd. and Yingli Green Energy Holding Co. Ltd.

Interest is payable annually and will equal the average of the returns of the basket stocks, subject to a floor of zero. The return of each basket stock is subject to a cap of 7% to 10% and a floor of negative 30%.

The payout at maturity will be par.

The CDs will be putable on Sept. 30, 2011, Sept. 28, 2012, Sept. 30, 2013, Sept. 30, 2014 and Sept. 30, 2015. Investors will receive the current market value of the CDs minus an early redemption charge of 3.5% in year one, 2.5% in year two, 1.5% in year three and 0.5% in year four. There is no charge in year five.

The CDs (Cusip: 40431GCT4) will price Aug. 24 and settle Aug. 27.

HSBC Securities (USA) Inc. is the agent.

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